FPIs Withdraw ₹12,569 Crore From Indian Equities in November Amid AI-Driven Global Sell-Off
FPIs pull out ₹12,569 crore from Indian equities in November amid global AI sell-off and tech market correction, reversing October’s brief inflows.
Key Points:
- FPIs withdraw ₹12,569 crore from Indian equities in the first week of November 2025.
- Global AI-driven tech sell-off sparks renewed risk aversion across Asian markets.
- India seen as an AI underperformer, prompting portfolio rebalancing by foreign investors.
- Domestic investors offset FPI outflows, pushing DII ownership to a record 18.26%.
- Analysts expect selective recovery as Indian corporate earnings improve.
TheInterviewTimes.com | November 9, 2025 — Foreign portfolio investors (FPIs) have withdrawn ₹12,569 crore from Indian equities in the first week of November 2025, marking a sharp reversal from October’s temporary inflows. The sell-off, as per data from Indian depositories, comes amid global uncertainty and an AI-driven correction in technology stocks across Asia.
This marks a quick turnaround from October’s ₹14,610 crore inflow, which briefly ended three consecutive months of heavy FPI selling between July and September, totaling ₹76,605 crore. The renewed outflows underline investor caution as India continues to lag global peers in the AI-driven stock rally dominating the U.S., China, and South Korea.
AI Perception Fuels FPI Strategy Shift
Market experts attribute this withdrawal to India’s perceived underperformance in the global AI race. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, explained that hedge funds are redirecting investments toward markets seen as beneficiaries of artificial intelligence growth.
“India is currently being viewed as an AI underperformer, and that perception is shaping FPI strategy,” he said. A simultaneous correction in Asian tech stocks—among the steepest since April—has intensified the global risk-off sentiment.
However, Vijayakumar noted that AI-linked valuations in markets like South Korea and Japan are “stretched and potentially forming a bubble,” which could limit further aggressive selling in Indian markets.
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Earnings Momentum May Lure Back FPIs
Despite the withdrawal, Indian corporate earnings for Q2 FY26 have provided a silver lining. According to Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, the quarterly results have been “marginally better than expected,” particularly within midcap segments.
He added, “Flows could turn positive in select sectors as the earnings season progresses,” though global uncertainties may continue to restrain foreign investors from taking on higher-risk positions in the near term.
Domestic Investors Absorb FPI Selling Pressure
While FPIs Withdraw ₹12,569 Crore, domestic institutional investors (DIIs) have stepped up, stabilizing the market. DIIs now hold a record 18.26% stake in NSE-listed firms, while FPI ownership has dropped to a 13-year low of 16.71%, reflecting a structural shift in market participation.
The consistent domestic inflows have helped Indian equities remain relatively resilient, even as global volatility persists.
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FPI Trends in Debt Market
FPIs have also trimmed positions in the Indian debt segment, withdrawing ₹1,758 crore under the general investment limit. This was partially offset by ₹1,416 crore inflows through the voluntary retention route, reflecting selective exposure adjustments amid changing yield dynamics.
India’s Outlook: Cautious but Selectively Optimistic
As AI-led market corrections continue globally, FPIs are recalibrating strategies across emerging markets. Analysts believe that India’s resilient domestic demand and improving earnings cycle could attract selective foreign buying once global risk sentiment stabilizes.
The near-term outlook remains cautiously watchful, but selective opportunities may emerge in sectors demonstrating strong fundamentals and sustained earnings growth.
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